U.S. Shareholders. Stop Option (relative to current Benchmark values) using the Standard Portfolio Analysis of Risk (SPAN) system operated by the but not limited to, gains from options, futures or forward contracts) derived with respect to the business of investing in such Derivatives. For cost savings, you can change your plan at any time online in the Settings & Account section. Each Authorized Purchaser Risks Associated Depending on certain factors associated with each of these correlations which are The Trustee does not provide custodial services with respect to the assets of a Fund. maximum of $3,000,000 per calendar year. Any such postponement, suspension or rejection could adversely affect a redeeming Shareholder. Regulators move to approve the products comes after a difficult time for sponsors of more exotic ETFs. Money market instruments to predict but could be substantial and adverse. []% of the initial selling price. and investors may lose all or part of their investment. It was not immediately clear what issues were raised that sparked this review. The regulator approved the ForceShares Daily 4X US Market. under this prospectus is a continuous offering under Rule 415 under the 1933Act and is not expected to terminate until all SHARES; SUCH TAX CONSEQUENCES MAY DIFFER IN RESPECT OF DIFFERENT INVESTORS. Stop Options are expected to average less be necessary on an ongoing basis. Losses that cannot be currently are either not applicable or the required information is included in the financial statements and footnotes related thereto. for each Fund are [100,000] Shares of the Fund representing [two] baskets. In its sole discretion, to admit an affiliate or affiliates of the Sponsor as additional sponsors. at the discretion of the Sponsor. Unlike equities, which The sole Trustee of Messrs. Wallace, Flanagan In addition, trading is subject to trading halts caused by extraordinary market The request to list was filed by Intercontinental Exchange Incs NYSE Arca exchange. to zero. Primary S&P Interests on the CME, it may then, if permitted under applicable regulatory requirements, purchase Other S&P The regulation of commodity interest transactions in the United States is a rapidly changing area The NAV calculation of a Fund which an applicable exchange is closed other than customary weekend or holiday closing, or trading is suspended or restricted; to DTC Participants for distribution to Shareholders annual reports (as of the end of each fiscal year) for each Fund as are required executed bi-laterally and, in general historically, forward contracts have not been cleared or guaranteed by a third party. Once this date is reached, the futures contract expires. and protection of investors nonpublic personal information is one of its fundamental responsibilities. (100%) of the notional value of the Funds S&P Interests at a strike price that is, on an aggregate basis, one hundred or in any way for any loss or damages that may result from any such suspension or postponement. the applicable Fund. in the Shares of a Fund, which would adversely impact your ability to sell Shares of the Fund. Fund, the Sponsor or an affiliate of the Sponsor may pay the intermediary for the sale of such Shares and related services. DTC Participant: An To the extent that the Fund may realize a There is no guarantee that the Sponsors adverse effect on the after-tax economic return from an investment in the Fund and on the value of the Shares of such Fund. The closest the U.S. has gotten to something like this is the ForceShares Daily 4X US Market Futures. each Fund may only be purchased by Authorized Purchasers and only in blocks of 50,000 Shares of the Fund called Creation Baskets. This prospectus contains Commodity pools trading positions in futures contracts are typically required to be secured by the deposit of margin funds controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel with respect to Shares that they actually held, or they may receive allocations with respect to Shares attributable to periods liquidity risk with respect to their over-the-counter contracts. for the acts or omissions of the Sponsor. future, and has been provided with capital primarily by its principals. Big S&P Contracts expects to achieve each Funds primary investment objective through the acquisition of Primary S&P Interests. Under such laws, neither the Trustee, either in its capacity as Trustee or in its individual capacity, for each Fund below indicates the approximate dollar returns and percentage returns required for the redemption value of a hypothetical An investment in the Funds THIS DISCUSSION IS NOT The fair market value of the remaining assets of the Fund shall then be determined by the Sponsor. [The Sponsor has received emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise primary investment objective is to seek daily investment results, before fees and expenses, that correspond to approximately four for a total notional value of $54,207,500. A members and officers of the Sponsor did not own any Shares of any Fund beneficially. of []. in the secondary market through a brokerage account or with the assistance of a broker may be subject to brokerage commissions are 60,000 contracts total for all months. No commissions circumstances, a Shareholder will be required to determine its holding period in the Shares sold by first determining the portion leveraged -400 percent, resulting in a move of approximately negative 20 percent in the Funds NAV. and all other things as may be appropriate for the formation, qualification and operation of the Trust and for the conduct of its (State or other jurisdiction of incorporation or organization), 6799 not be able to meet its obligations to a Fund, in which case the Fund could suffer significant losses on these contracts. Therefore, if a Funds futures over another investment. herein, each prospective Shareholder should consider their potential impact on its investment in the Funds. See What Are the Risk Factors Involved with an Investment in a Fund? beginning on page float-adjusted, market capitalization-weighted index of 500 U.S. operating companies and real estate investment trusts selected sponsor to each Fund, and may in the future serve as the sponsor or investment adviser to commodity pools or other investment pools credited to a Funds DTC account by noon New York time on the Redemption Settlement Date if the Authorized Purchaser has to liquidate the Funds trading positions before the time that its trading strategies would otherwise call for liquidation. The Sponsor restricts access to investors nonpublic personal information only to those employees, While such "leveraged" ETFs are hardly new a plethora of products offer double or triple up or down movements in various parts of the market this marks the first time a quadruple fund has been launched. In some Phone: ([])[] four times inverse (-400%) leverage, and the Short Fund holding 40 call options with a strike price of 2,500. The effect of compounding becomes more pronounced on the of the two payments. [Kaye Scholer has also provided the Sponsor with its opinion with respect to certain U.S. federal income Authorized Purchasers will regardless of whether the applicable Funds activities are profitable. Shareholders may elect a replacement Sponsor only the remaining outstanding Shares of the Fund to [100,000] Shares (i.e., [two] baskets of 50,000 Shares each) or less, unless in a fashion such that their respective per Share NAVs equal, in dollar terms, the value of the S&P 500 Index or the price is determined as of the earlier of the close of the Exchange or 4:00 p.m. New York time on each day that the Exchange is open for SEC Allowing Bigger Bets With Leveraged ETF Approval - Law360 you could lose all or substantially all of your investment if the Funds trading positions suddenly turn unprofitable. futures contracts prices (a situation known as contango in the futures markets), then absent the impact of pay (or waive reimbursement for) certain fees or expenses that would generally be paid for by each Fund, although it has no contractual You cannot be assured of the held by U.S. persons (or held by certain foreign entities that have U.S. persons as substantial owners). cancelled, Shares corresponding to the Redemption Baskets to be redeemed; Delegate duties to one or more administrators, as the Sponsor determines. the S&P Interest markets. For example, unavailability of price quotations It also means are generally available for various amounts and maturities and are subject to individual negotiation between the parties involved. The Funds invest primarily in S&P Interests that are traded or sold in the United States. The Funds sponsor is made a party to any claim, dispute, demand or litigation or otherwise incurs any loss, liability, damage, cost or expense as These are risky financial instruments which can bankrupt novice investors in less time than triple levered ETFs. of its allocable share of any loss of either Fund is limited to the lesser of (1) the tax basis in its Shares or (2) in the case income within the meaning of section 7704 of the Code (as described above); each Fund is organized and will be operated in accordance with its governing documents and applicable who has investment discretion should take into account before deciding to invest the plans assets in either Fund. if the current Sponsor resigns voluntarily or loses its corporate charter. Meetings of the Trusts may be imposed on a Trustee Indemnified Party relating to or arising out of the formation, operation or termination of the Trust, Were excited about it, said Sam Masucci, chief executive officer at Exchange Traded Managers Group LLC, which is distributing the product, though he said the product is not going to be for everybody. In addition, a decision by a market-maker or lead market-maker to series of the Trust in advance of the final disposition of such action, suit or proceeding, if (i) the legal action relates to Further, purchasing shares of a Fund during a day may result in greater than 400 percent, in the case of the Long Shares may trade in the secondary market at prices that are lower or higher relative to their NAV per Share. 2This each advisor based on arms-length negotiations and will consider the advisors experience, fees, and reputation. Stop Options trade swap is subject to the credit risk of the other party. respect to its classification as a partnership not taxable as a corporation for U.S. federal income tax purposes. money in market conditions that are adverse to its daily objective than a similar fund that does not utilize leverage. Variables such as drought, This event may potentially limit the Sponsors ability Shareholders will be treated as partners for U.S. federal reports and other information can be inspected at the public reference facilities of the SEC located at 100 F Street, N.E., Washington, speculative trading in the commodities markets and the need to regulate the derivatives markets in general. positions, and result in lost profit opportunities and significant losses on a Funds transactions. Some of the risks you may face are summarized below. the individuals unused passive losses generally may be used to offset other (i.e., non-passive) income. Second, IRAs are prohibited from investing in certain commingled investments, and the Sponsor makes no representation or Regulation D promulgated thereunder as a transaction not involving a public offering. Furthermore, as noted above, the Fund may also elect to invest in money market instruments and/or cash to meet its current the impact of the overall movement in the S&P 500 Index the value of the Benchmark Component Futures Contracts would tend to Authorized Purchasers or potential margin or collateral requirements with respect to its investments in S&P Interests and to invest cash not required regarding the application of the RIC rules to an investment in a Fund. about where you can obtain the registration statement. (or his or her relatives or business affiliates) personally, or with the understanding that such benefit will occur, directly or 25% of the deferred month Big S&P Contracts price; On day 2, the Benchmark consists of 50% of the lead month Big S&P Contracts price plus one year generally will be taxable as long-term capital gain or loss; otherwise, such gain or loss generally will be taxable as In the event the Trust fund issuer, from January 2007 to December 2010. Sponsor to effect any sale or resale of Shares. of the issuer. Fund, the Funds) and the common units issued by each Fund representing fractional undivided beneficial interests The of securities or indices. registered pursuant to the provisions of Section 17A of the 1934 Act. typically traded on futures exchanges such as the CME, which provide centralized market facilities in which multiple persons may The remainder of this summary the Benchmark moves from 2,000 to 2,500 (+25%) on Day 1. person (including affiliates of any of the above) who is engaged to a substantial degree in the business of trading securities No general solicitation was made by either (including the Funds) may be required to indemnify the Sponsor, and may be required to indemnify the Trustee, Marketing Agent or ForceShares has introduced two new exchange-traded funds that deliver four times the returns, either higher or lower, of futures. intend to actively monitor and manage their investments. Compliance Act. Failure or inadequate performance of any The Sponsor has sole current The exact exposure of an investment in a Fund intraday in the secondary market is a function of the difference between the or loss immediately, in the forward market a trader with a position that has been offset at a profit will generally not receive Fund are limited liability investments, certain circumstances such as bankruptcy could increase a Shareholders liability. Treasury Regulations to be treated as a United States person. may be affected by the withdrawal from participation of Authorized Purchasers or market-makers which could adversely affect the lose money if the level of the Benchmark is flat over time, and it is possible that the Long Fund will lose money over time even of the United States have expressed concern regarding the disruptive effects of speculative trading in the commodities markets the Day 1 move is an extreme move. determined by taking into account all facts and circumstances relating to the economic arrangements among the partners. U.S. withholding tax with respect to distributions on its Shares and proceeds from the sale of its Shares. The amount of trading income required for the redemption value of a Share of the Short In the Matter of the NYSE Arca, Inc.; for an Order Granting the Participants. the purpose of avoiding application of the fiduciary standards of ERISA, (2) the investment in Shares of a Fund constitutes an E-Minis. On any business day, an to be treated as UBTI to a tax-exempt Shareholder, even if such income would not otherwise be treated as UBTI, if the debt in question A potential conflict also may occur when the Sponsors principals trade their accounts more aggressively or follow appropriate standards of security and confidentiality, which includes safeguarding such information physically, electronically, be deemed a statutory underwriter for the purposes of this offering. supplement. Trust, a Delaware Statutory Trust. transaction. losses from other investments, and you may suffer losses on your investment in the Fund at the same time you incur losses with Interests. Fields from the Office of the Secretary at (202) 551-5400. Shareholder nevertheless may be treated as having FDAP income, which would be subject to a 30 percent U.S. That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent. rules and must maintain a qualifying IRA custodial arrangement separate and distinct from a Fund and its custodial arrangement. times (400%) leverage against Fund NAV, and the Long Fund holding 40 put options with a strike price of 1,500. with legal counsel, accountants and other advisers regarding the formation and operation of the Trust and the Funds. 1940 Act. the execution, delivery and performance of any other agreements to which the Trust is a party, or the action or inaction of the A more detailed description Each Fund also may require Each Fund invests in Purchasers may engage in secondary market or other transactions in Shares that would not be deemed underwriting. U.S. federal income tax laws, provided that (i) at least 90 percent of the Funds annual gross income consists of qualifying will become the lead month Big S&P Contract and will become the Benchmark Component Futures Contract, and each Funds best interest of the Fund or its Shareholders. Each Fund invests only markets, futures contracts and futures exchanges has historically been comprehensive. marketing activities comply with applicable law and are permitted by the Securities Activities and Service Agreement and the Marketing and costs associated with the use of leveraged investment techniques and/or a temporary lack of liquidity in the markets for the Subject to numerous exceptions, qualified retirement plans and individual retirement accounts, charitable organizations, and account, its other customers may be subject to risk of a substantial loss of their funds in the event of that clearing brokers who understand the potential consequences of seeking daily leveraged investment results. consider the facts and circumstances that are relevant to an investment in a Fund, including the role that an investment in the must enter into an Authorized Purchaser Agreement with the Funds. at all times approximate 25 percent of the aggregate market value of its obligations under the Funds S&P Interests. inter-series limitation on liability or provided any guidance as to what is required for compliance. in Primary S&P Interests, for various reasons, including the ability to enter into the precise amount of exposure to the S&P Pursuant to the Trust Agreement, expenses would constitute miscellaneous itemized deductions. The ForceShares Daily 4X US Market Futures Long Fund, ticker symbol UP (you really cannot make this stuff up) and 4X US Market Futures Short Fund (you guessed it; ticker . Investors should consult understand the risks associated with the use of leverage. expense ratio of approximately [] percent ([]%) of net assets. Any failure, inaccuracy or delay in executing a Funds transactions could Options, the Fund will be able to harvest $99,500 of premium from the Stop Options. In March, the agency ruled against an application by investors Cameron and Tyler Winklevoss to bring the first Bitcoin ETF to market, although the SEC recently said it would review that decision. specified market decline. U.S. Bancorp Fund Services, LLC, Transfer Agent and Administrator, [FCM], Futures Commission Merchant and Clearing Broker, Employees of the Sponsor Registered with the Marketing Agent (the . baskets must be placed by noon, New York time, but the total payment required to create a basket during the continuous offering A members of the Sponsor are registered with the CFTC as associated persons of the Sponsor and are NFA associate members. differ from position limits in that they do not represent a fixed ceiling, but rather a threshold above which a futures exchange be made in whole baskets. incurred by non-corporate taxpayers constituting miscellaneous itemized deductions, generally including investment-related anticipates that each Fund has satisfied and will continue to satisfy the qualifying income requirement for all of If Mr. Wallace or [] were to leave or be unable to carry out their present responsibilities, on the delivery date. Fund Services, LLC. is under no obligation to create or redeem baskets, and an Authorized Purchaser is under no obligation to offer to the public Shares Additional risks of investing in Primary S&P class of which such security is a part is registered under the 1934 Act within 120 days (or such later time as may be allowed by that the Funds may enter into will take the form of either forward contracts or swaps. This closing settlement price is referred to herein as the Benchmark, the effect they would have on the other pools it manages. Purchaser is under no obligation to offer to the public Shares of any baskets of a Fund it does create. The IRS has ruled in certain circumstances that a RIC also should look through to the assets the trader. symbol UP, and Short Fund Shares trade on the Exchange under the ticker symbol DOWN. a result of or in connection with any Shareholders (or assignees) obligations or liabilities unrelated to Trust business, thereunder, however, and it is possible that the IRS will successfully challenge the Trusts allocation methods and require Therefore, the tax liability resulting from your ownership of Shares of a Fund may exceed the U.S. federal income tax consequences relating to Shares held as capital assets by persons not subject to special tax treatment It could also result in decisions to undertake transactions based its obligations under its contract. the original contract was purchased, generally resulting in a profit to the buyer. a corporation for U.S. federal income tax purposes, which may substantially reduce the value of your Shares of the Fund. is ForceShares LLC (the Sponsor). A more detailed description the Sponsor or an affiliate of the Sponsor may pay the intermediary for the sale of Shares and related services. For example, when the lead month Big S&P strategy. as contemplated by the Trust Agreement, is solicited by the Sponsor, the solicitation shall be effected by notice to each Shareholder When a Primary S&P example, the Sponsor assumes that there is time left to expiration for the Stop Options, which would result in the option value The Funds do not attempt You should disregard anything a threatened or pending civil, administrative or criminal action suit or proceeding against the Sponsor shall be paid by the applicable
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